MMI February 2001

Vol. 11, No. 2: February 2001


Table of Contents

Cover story

M&A Deals in 2000 Hit Three Figures

Chart: EMS Industry Mergers and Acquisitions 1994-2000

MMI Scorecard: EMS Industry Mergers and Acquisitions in 2000

World Markets

CMs Staking Claims in Japan

News

Ericsson Outsources Cell-Phone Operations To Flextronics

Lucent To Put Two Plants on the Block

Another OEM to outsource

Asset Selling on the Rise in Europe

Finmek Acquires Italian Competitor

Solectron To Add PC Card Maker

Sanmina Bids for Swedish Enclosure Company

Flextronics Makes Optical Deals

Western Electronics Gains Sheet Metal Operation

SCI Reorganizes

Jabil Creates Technology Division

More people on the move

Correction


M&A Deals in 2000 Hit Three Figures

Once again, mergers and acquisitions in the EMS industry have climbed to a new high. MMI’s annual M&A Scorecard for the year 2000 lists a total of 111 deals, up 14% from a final total of 97 counted in 1999 (April ’00, p. 8). See the M&A Scorecard on pages 2-5.

As was the case in 1999, asset divestitures by OEMs accounted for the largest number of transactions last year. This type of activity, which includes divestitures of both OEM manufacturing operations and OEM design activities, produced 44 deals in 2000, an increase of 29% over 1999’s total of 34.

The number of EMS operations sold to competitors also grew in 2000. MMI counted 32 such deals, compared with 25 the year before. The increase amounted to 28%. In some other cases, OEMs sold EMS operations to contract manufacturers. These cases, which numbered seven in 1999, run counterintuitive to the notion that OEMs had completely withdrawn from the contract manufacturing business.

Using these two types of deals – EMS operations sold to competitors and EMS operations sold by OEMs – one can gauge consolidation activity. Add the numbers from these two categories (32 + 7) and subtract four cases that represent only part of an EMS business, and one finds that 35 contract manufacturers disappeared last year. That’s up from 28 CMs gone in 1999 and says that 25% more CMs were consolidated in 2000 than in 1999.

Contract manufacturers also make deals for other reasons. An acquisition may broaden service capabilities on the front or back end or may involve vertical integration of supply chain activities such as PCB fabrication or enclosure manufacturing. Called a service or supply chain extension, this type of deal may mean buying an independent company or may involve an OEM divestiture, as in the first category. So not every deal fits into a single category (see Scorecard).

In the last kind of transaction, a new player emerges from the buyout of an existing EMS operation. Five such players arrived last year, showing that industry growth continues to attract some new blood despite consolidation.

MMI continues to use the same system for classifying industry transactions, except that diversification disappeared as a category for 2000 (Feb. ’00, p. 1, 5-6).

Last year, Flextronics International was the most active deal maker by far. The company’s 24 acquisitions, or an average of two a month, were more than double the total of the number-two acquirer, Solectron.

Sometimes, a CM can achieve its aim through an alliance, which may or may not include an equity investment, or through a joint venture. In 2000, there were 16 such partnerships made for a variety of purposes, compared with 13 the year before (last table below).

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World Markets


CMs Staking Claims in Japan

When it comes to untapped markets for outsourcing, none is larger than Japan (Jan., p. 2). Sensing that Japanese OEMs are warming to the concept of outsourcing, a growing number of the largest CMs are setting up for business there. Among those who have recently put Japan on the front burner are Celestica, Jabil Circuit and SCI Systems.

Take Jabil. The provider just established an office in Tokyo under the name Jabil Circuit Japan. The new office will focus on developing partnerships with Japanese OEMs.

“An increasing number of forward-thinking Japanese companies are pioneering new relationships with EMS providers. Jabil’s new Japan location will provide local support for the development of new products and will be a customer access point to our global manufacturing infrastructure,” states Tim Main, Jabil president and CEO.

The company believes there is much opportunity to support OEM requirements both inside and outside Japan.

Jabil will also focus on potential acquisition opportunities in Japan.

Then there’s SCI, which already has an office in Japan. SCI will use an alliance to further its business development efforts there. The provider has formed a partnership with Sohwa Corp. of Japan to offer an end-to-end solution to Japanese customers. The partners will jointly provide design engineering, new production introduction and manufacturing to the Japanese market.

“Through this partnership, SCI will have access to Sohwa’s design engineering capability supported by 120 design engineers. SCI will also have the opportunity to support Sohwa’s customer base including major Japanese corporations. Sohwa, in turn, will have access to SCI’s global manufacturing services and supply chain management capabilities,” states Eddie Wakashita, SCI’s VP of business development, Japan.

The two companies have set up a dedicated team to integrate activities between them.

SCI Systems Japan was slated to relocate last month in Shin-Yokohama, near Sohwa’s headquarters.

Moreover, SCI is already making headway in the Japanese market. The company has landed a multimillion-dollar contract to manufacture optical devices for Hitachi Media Electronics, Ltd. (HMEL) at SCI’s Kunshan, China plant. HMEL is a wholly owned subsidiary of Hitachi, Ltd.

“Outsourcing our manufacturing to SCI, a world-class EMS with a presence in Japan, will enable HMEL to better meet the growing needs of the market in a much more timely manner. SCI has been extremely responsive and performed very well throughout the selection process. We fully expect to expand our relationship with SCI as a result of our mutual success,” states Kenichi Katagiri, deputy GM, Business Integration Office.

Production is due to begin in April.

Meanwhile, Celestica recently set up its own Japanese subsidiary, Celestica Japan KK, in Tokyo (Nov. ’00, p. 10). To head the new operation, Celestica appointed Michio Naruto, a former vice chairman of Fujitsu Ltd. with extensive ties to the Japanese electronics industry.

The new subsidiary will focus on building relationships with Japanese OEMs as well as establishing design, prototyping, NPI and repair capabilities.

Celestica is also reporting success with a prominent Japanese OEM – NEC. The company has now divested two facilities to Celestica, one in Brazil (July, ’00, p. 6-7) and more recently a handset plant in the UK (Dec. ’00, p. 6).

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News


Ericsson Outsources Cell-Phone Operations To Flextronics

But this decision means cutbacks at another Ericsson provider, Elcoteq

Facing stiff competition in mobile phones and operating losses in that business, Ericsson (Stockholm, Sweden) has decided to turn its mobile phone operations over to Flextronics International (Singapore). The two companies have signed a memorandum of understanding.

Flextronics will take over all mobile phone-related facilities in San Jose dos Campos, Brazil; Shah Alam, Malaysia; Linköping and Pilängen, Sweden; Carlton and Scunthorpe, UK; and parts of a US plant in Lynchburg, VA. Ericsson expects 4200 of its employees will join Flextronics, while some 600 Swedish jobs will be cut. Although a transaction price has yet to be fixed, Flextronics estimates it will pay $300 million to $800 million for inventory and equipment at book value. So there is no goodwill. The provider is not buying any Ericsson plants; instead Flextronics will lease facility space from Ericsson.

“It’s the largest single award that we’ve ever gotten,” said Michael Marks, Flextronics’ chairman and CEO, in a conference call with analysts. Although Marks was not yet able to put a revenue figure on this deal, he did say that it would yield “quite a bit more revenue” than Jabil’s recent agreement with Marconi. Jabil’s deal will generate more than $4 billion in sales over three years (Jan., p. 5-7).

On the call, Marks was asked if the Ericsson deal is larger than Flextronics’ pact with Motorola, valued at $32 billion. “It’s not bigger than [the] Motorola [deal] in the sense that we have accumulated the revenue over five years. It’s possible it could be similar in size…,” he replied. Marks contrasted the deals with Motorola and Ericsson by saying that the Ericsson deal comes with actual orders.

Flextronics will assume virtually all of Ericsson’s handset production that is not outsourced to ODMs (original design manufacturers), who handle design and manufacturing. According to Marks, the bulk of the handset business comes from products designed by Ericsson. He said Flextronics will “have more than 80% of the different models.”

Among other operations that Flextronics will take over are industrialization and new product introduction (NPI) of Ericsson-designed mobile phones. The provider will acquire cell-phone NPI centers in Sweden and the US. Flextronics will also handle global supply-chain management for Ericsson phones. As a result, a substantial portion of phone plastics and printed circuit boards will come from within vertically integrated Flextronics over time. Finally, the company will take charge of customization, pack-out and logistics management.

Eventually, manufacturing will take place primarily in low-cost locations in Asia. Flextronics will ramp production in its Doumen, China industrial park, which serves as the primary Asian location for consumer products. Marks also mentioned Malaysia as another big site for this handset work. Flextronics expects to begin managing Ericsson’s operations on April 1 and to acquire the operations over the course of 2001. The provider anticipates that it will not expand production at Ericsson sites and will take production down as appropriate.

According to Ericsson, the outsourcing agreement will lead to rapid improvement in economies of scale, much smaller capital exposure and more volume flexibility.

Marks told analysts that Flextronics was selected for a number of reasons. They include a longstanding relationship between the two companies, which is “natural to extend…in this manner,” he said. Second, the mobile phone market has shifted to a high-volume consumer electronics business, which favors Flextronics’ presence in low-cost markets, particularly Asia. A third reason stems from the company’s broad service offering that includes vertical integration of key components such as plastics and PCBs, which are critical to the supply of such consumer products.

“The concept here is that we’re going to consolidate volume in Asia, consolidate it around an Asian supply base, which is the least expensive supply base in the world. By a combination of those two things plus having logistics done very close by, really as part of the manufacturing operation, we think we’re going to be able to take quite a bit of cost out of the product for Ericsson and use those same cost reductions for other customers as well,” said Marks.

Flextronics expects revenue will transition over multiple quarters, beginning in the June quarter. The effect on EPS is expected to be neutral in that quarter and then increasingly positive. By the March 2002 quarter, margins are expected to reach company norms for this type of business.

To fund expenses related to the Ericsson deal, Flextronics plans a public offering of 27 million common shares at $37.9375 per share, which will gross $1.024 billion. The company also intends to use the offering to fund further expansion of its business and for other general purposes.

In addition to the Flextronics deal, Ericsson signed an agreement with GVC, a Taiwanese ODM. This ODM agreement includes outsourcing of product development and production and complements Ericsson’s arrangement with another Taiwanese ODM, Arima. Long known as suppliers of outsourced PC products, ODMs have lately expanded into other product markets such as cell phones (Dec. ’00, p. 6-7).

Meanwhile, Flextronics has also won a number of new infrastructure programs from Ericsson in 2G and 3G products and fixed access systems. Regarding the latter, full production is expected in the second half of 2002. In addition, Flextronics is ramping the production of various infrastructure products for Ericsson in Puebla, Mexico, and 3G products at the provider’s new industrial park in Poland, a site focused on infrastructure. Also included in this new business are sites in Karlskrona and Visby, Sweden, and a site in Shanghai, China, recently acquired from JIT Holdings. The Shanghai location is being set up as an Asian center for infrastructure products. Counting the sites in Mexico, Poland and China, Flextronics can now offer low-cost locations for infrastructure products in the three major markets. Flextronics is also increasing its infrastructure business with Alcatel, Siemens, Nokia and Motorola.

Elcoteq and Ericsson change their relationship

The Flextronics agreement spelled bad news for Elcoteq (Helsinki/Lohja, Finland), another Ericsson provider. Elcoteq’s previous contract with Ericsson, a major customer, called for a significant increase in mobile phone volumes at Elcoteq’s plants in Hungary and Estonia. That contract will not materialize, reports Elcoteq. What’s more, mobile phone manufacturing for Ericsson will be discontinued in Tallinn, Estonia, and in Pécs, Hungary. Elcoteq states, “The volume of Elcoteq’s mobile phone manufacturing for Ericsson will decrease substantially.”

But Ericsson is not severing ties with Elcoteq. The two companies have renegotiated their relationship and have agreed to gradually shift the emphasis from mobile phones to mobile systems. This new direction will reduce volumes during the first half of the year, but they will begin to pick up toward the end of the year.

The loss of mobile phone business will result in cutbacks at Elcoteq. During the spring, the provider will reduce the number of employees in Hungary by about 800 from the current total of about 3200. In Estonia, the company will cut the work force during the spring by about 600 from the current count of about 3200. These reductions represent about 12.3% of Elcoteq’s work force of 11,371 at the end of 2000. The provider has produced high volumes of Ericsson cell phones since 1997 in Tallinn, Estonia, and since 2000 in Pécs, Hungary.

Elcoteq has also delayed the 6100-m2 expansion of its second plant in Tallinn by six months. The extension was originally scheduled to start production in the second half of the year. However, the 6300-m2 first stage of the new network equipment plant will go on line as planned during Q1. Construction of a 11,000-m2 plant in Wroclaw, Poland, will continue as planned, but the plant will go into operation about three months later than scheduled because of the change in the relationship between the two companies. This plant, which will focus on communications products and industrial electronics, was originally due to start up in the second half of the year.

Elcoteq is evaluating possible impact on its operations in Finland and elsewhere.

Ericsson and Nokia accounted for 92% of Elcoteq’s sales in 2000, while mobile phones and accessories represented 75% of sales. Reuters reports that Ericsson was Elcoteq’s second largest customer last year. The provider’s sales for 2000 jumped 194% to MEUR 2213.5 versus MEUR 752.5 in 1999. Operating profit amounted to MEUR 66.4, or 3.0% of sales. Return on capital employed stood at 20.4%, up from 8.2% a year earlier.

The provider says sales for the first half of 2001 are likely to remain at the same level as in the year-earlier period. As a result, profitability will weaken temporarily. Still, Elcoteq expects that full-year sales will increase, and “results of operations in 2001 will be clearly positive.”

Despite the news from Ericsson, Elcoteq is seeing a large increase in its business with another customer, ABB. (See news on the next page.)

Mobile phones still high in outsourcing potential

In addition to Ericsson, OEMs such as Motorola and NEC have recently made announcements that include cell-phone outsourcing (Jan., p. 8; Dec. ’00, p. 6-7; June ’00, p. 1). Nevertheless, the cell-phone market remains high in outsourcing potential. “The great vast majority of this forty or fifty billion-dollar production market is still in house,” said Flextronics’ Marks to analysts. “We believe that a tremendous amount of it is going out of house.”

Nokia’s latest estimate of the world market for mobile phones in 2001 is 500 to 550 million units.

With the largest share of that world market, Nokia also has the highest volumes in internally produced handsets. The Associated Press recently quoted Nokia’s CEO Jorma Ollila as saying “manufacturing remains a core competence” in the mobile phone business.

Still, Nokia reportedly plans to do more outsourcing. According to a Reuters report, Nokia intends to double the number of mobile phones produced by contract manufacturers to 20% this year. Since Nokia sold 128 million mobile phones in 2000, this increase in outsourcing could involve more than 10% of that total, or more than 13 million handsets.

Motorola is another cell-phone OEM where internal production still predominates. At present, about 20% of its handset business outsourced.

Interestingly, Motorola and Nokia announced within days of each other that they will each close a mobile phone facility in the US. Motorola will shut down its handset production in Harvard, IL (Jan., p. 8), while Nokia will close one of its two mobile phone factories in North Texas. Nokia will move some its of Texas production to its facilities in Korea and Mexico.

Clearly, these two examples show that mobile phone production is migrating to lower cost regions of the world. But the Ericsson deal brings up a question. By selecting Flextronics and withdrawing handset production from Elcoteq plants in Central/Eastern Europe, Ericsson has voted for Asia as its primary location for low-cost manufacturing of mobile phones. Will others in the mobile phone business follow suit and put the bulk of their handset production in Asia? Or will they spread it among low-cost sites worldwide?

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Lucent To Put Two Plants on the Block

As part of a seven-point restructuring program, Lucent Technologies (Murray Hill, NJ) intends to expand its previously announced plans to use contract manufacturers. The company intends to sell all or a portion of two large US facilities to CMs and in the process shed about 6000 workers. Lucent has the option of selling these plants separately or together.

According to spokesperson Mary Ward, Lucent will most likely sell all of its Oklahoma City Global Provisioning Center in Oklahoma, a facility with 1.80 million ft2. In Columbus, OH, the company is looking at selling a portion or all of a 2.01 million-ft2 facility. Lucent expects these moves to affect about 4000 employees in Oklahoma City and about 2000 out of about 4400 workers in Columbus.

At the Columbus site, a contract manufacturer will do all circuit board assembly and some amount of unit assembly work for wireless products. “That’s an expansion over what we announced before,” says Ward. Lucent also plans to maintain a small center for system integration at or near the site.

In Oklahoma City, a CM will handle PCB and final assembly for switching and access systems. Here a CM will also take on more work than originally planned. Initially, Lucent had intended to split the Oklahoma City work between a CM and a systems integration center. Now that Lucent has dropped this center from its plans, virtually all of the work done in Oklahoma City will be moved to a CM.

Lucent hopes to have a buyer in place in six months or so and to complete a transition in another three to six months. Ideally, the facilities would be completely transitioned by the close of Lucent’s fiscal year, which ends in September.

In the spring of 2000, Lucent announced an outsourcing effort with the potential to affect 12 manufacturing locations in the US (May ’00, p. 7-8; June ’00, p. 2). After selling its Power Systems business and spinning off Avaya, Lucent is down to four main facilities in the US including Columbus and Oklahoma City. The other two – Mt. Olive, NJ, and North Andover, MA – have been designated systems integration centers. In the US, Lucent still has three other plants – Charlotte, NC; Merriam, KS; and Phoenix, AZ – whose status is unknown.

Another OEM to outsource… GenRad (Westford, MA), whose hardware includes in-circuit and functional test equipment and diagnostic systems, will outsource all PCB assembly.

Asset Selling on the Rise in Europe

ABB and Océ divest to Elcoteq and MSL

Ericsson may be the most visible seller of plant assets in Europe, but it’s far from the only one. As outsourcing picks up steam in Europe, more OEM plants there are being turned over to contract manufacturers. Perhaps the latest examples are divestitures by ABB and Océ.

Last month, Océ sold a 12,500-m2 operation in Guerande, France, to Manufacturers’ Services Ltd. (Concord, MA). MSL will take over the plant’s production of PCB assemblies for scanners and folding machines associated with Océ’s high-end printers. This acquisition also includes complex subassembly work performed by the plant. What’s more, MSL has become Océ’s primary EMS provider.

Steve Schultz, MSL’s VP of marketing and communications, says the deal “has given us access to the French marketplace.”

The acquisition also expands the relationship between the two companies as MSL already supplies Océ out of Athlone, Ireland.

About 125 people work at the French site.

Another European OEM, ABB, is outsourcing its electronic production unit in Turgi, Switzerland, to Finland’s Elcoteq. With 2000 turnover over $60 million, the unit will more than double the business between ABB and Elcoteq. The provider also expects this acquisition will nearly double its industrial electronics business in 2001.

Besides supplying ABB, the Turgi unit provides EMS to several other European industrial electronics customers. Elcoteq will continue production in Turgi and retain the 300 employees there. In connection with this transaction, ABB has selected Elcoteq as the preferred supplier to its Automation Technology Products division. The two companies have entered into a multiyear supply agreement, which extends to after-sales services.

ABB says the deal is part of its efforts to focus on core business activities.

European plant for sale…Japan’s Alps Electric is looking for a buyer for its PCBA facility in Arbroath, Scotland. With 30,000 ft2 of production and office space, the plant currently manufactures tuner boards. Contact Michael Hannon of MHM (Ayr, Scotland) at mhmayr@msn.com.

Finmek Acquires Italian Competitor

Finmek Group, whose contract manufacturing unit is based in Padova, Italy, has acquired another Italian CM, Ixtant with headquarters in Ronchi dei Legionari.

Ixtant operates 13 plants with 255,000 m2, 2300 employees and 55 SMT lines. Ten of those facilities are located in Italy, and the remaining three are in Berlin, Germany; Timisoara, Romania; and Nova Gradiska, Croatia. Four of the Italian plants and the German and Romanian plants are considered high volume. Of the others, two Italian plants serve as telecom competence centers for high-frequency applications.

Telecom customers include Acatel, Marconi Communications, Motorola, Nortel and Thomson. The telecom segment accounts for 56% of Ixtant’s business.

Established in 1997, Ixtant was formed as a subsidiary of the Italian cell phone supplier Telital (Oct. ’99, p. 4).

Solectron To Add PC Card Maker

Solectron (Milpitas, CA) has entered into an agreement to acquire Centennial Technologies (Wilmington, MA), a supplier of PC memory cards, for about 2.96 million shares of Solectron common stock. The net purchase price was valued at about $108 million, based on the average closing price of Solectron’s stock in the week prior to the deal’s announcement last month.

For the fiscal Q3 ended Dec. 23, 2000, Centennial reported net income of $2.8 million on sales of $21.0 million. Excluding a write-down, net income would be been $4.5 million.

Solectron plans to offer jobs to more than 140 Centennial employees. The deal is expected to close during Q2. Centennial will operate as part of Solectron’s Technology Solutions Business Unit.

Sanmina Bids for Swedish Enclosure Company

Sanmina (San Jose, CA) intends to make a tender offer for all of the shares of AB Segerström & Svensson (Stockholm, Sweden), a supplier of integrated enclosure systems to the communications sector. The offer, to be paid in Sanmina shares, has an total value of about $511 million. Closing is expected by March 1 and is subject to several conditions including acceptance by holders of at least 90% of Segerström’s outstanding shares.

With about 2000 employees, Segerström operates 12 facilities among Sweden, Finland, Brazil, Hungary, Scotland and the US. Customers include Ericsson, Lucent, Motorola and Nokia. Sales for the March quarter are projected at $75 to $85 million. Based on a preliminary income statement, Sanmina estimates its FY 2001 EPS will increase by three to four cents as a result of this deal.

This is a further example of the vertical integration of enclosures by a number of EMS providers (Jan., p. 3).

Flextronics Makes Optical Deals

Flextronics has acquired two optical companies: Wave Optics, billed as the largest independent design and manufacturing service provider for the optical component industry, and Fico Fiber Optics, which focuses on industrialization and manufacturing of optical modules, electro-optical modules and passive optical components.

These are the second and third acquisitions announced for the Flextronics Photonics business unit (Oct. ’00, p. 9-10). Flextronics claims it is building the most technologically comprehensive service offering in photonics and optics.

Western Electronics Gains Sheet Metal Operation

Western Electronics (Meridian, ID) has acquired Delta Engineering and Manufacturing Corp. (Tualatin, OR), which specializes in precision sheet metal fabrication and value-added assembly. Delta will now operate as Western Electronics Delta Corp.

“Sheet metal fabrication is a critical component of our full-service solution strategy,” states Var Reeve, president and CEO of Western Electronics. “The acquisition of Delta is a major step toward our goal to provide our customers with one-stop contract manufacturing services.”

MMI recently identified WE as an up-and-coming CM (Nov. ’00, p. 5-6).

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SCI Reorganizes

Also partners with Cadence unit

SCI Systems (Huntsville, AL) recently set up a new organization that divides SCI’s geographic coverage into four regions of the world.

In a separate move, SCI announced last month an alliance with Tality Corp., a subsidiary of Cadence Design Systems.

For the new organization, SCI created four executive VP (EVP) positions, each in charge of a region. In addition, SCI established a new Enclosure Division and restructured its marketing and sales and IT units.

Initially, the provider named Pete Scheffler as EVP of North America, consisting of the US and Canada; Chuck Parks as EVP of Latin America, made up of Mexico and South America; and David Rees as EVP of Europe/Middle East. Then last month, SCI added the fourth and final piece to its geographic puzzle when David Dutkowsky joined the company as EVP of the Asia/Pacific Group. Dutkowsky came from connector supplier FCI, where he served as senior VP – Asia Pacific.

Furthermore, SCI split the Asia/Pacific Group into northern and southern divisions. To that end, the company hired Santosh Rao as senior VP of Southern Asia/Pacific, who will serve alongside of CT Chua, senior VP of Northern Asia/Pacific. Rao joined SCI from Solectron, where he had been VP and GM responsible for Solectron’s Charlotte, NC site.

To lead the new Enclosure Division, SCI tapped George King, who became senior VP of Worldwide Enclosures. King is the son of SCI founder and former CEO Olin King. Having acquired two enclosure suppliers since 1999, the provider has been building an enclosure business (Nov. ’00, p. 8).

Other changes were made as well. SCI’s marketing and sales team has been structured as a worldwide organization under Bruce Leisure, corporate marketing and sales VP. The IT group has also been organized as a worldwide unit under Vin Melvin, chief information officer.

Meanwhile, the alliance with Tality will provide a comprehensive product development solution to communications customers. This alliance will combine Tality’s 1100 design engineers and their capabilities with SCI’s engineering, EMS and supply-chain capabilities. The idea is to radically reduce time to market as well as offer a complete solution for the entire product lifecycle.

The partners plan to colocate certain SCI new product introduction centers with Tality design centers to provide turnkey engineering and prototyping.

This is yet another move by SCI to further the growth of its communications business.

Formerly Cadence’s Electronic Design Services group, Tality operates 14 design centers worldwide and describes itself as the world’s largest independent provider of engineering services and intellectual property for the design of complex electronic systems and integrated circuits.

Jabil Creates Technology Division

Also announces new positions and promotions

Jabil Circuit (St. Petersburg, FL) has formed a technology division, Jabil Technology Services, which will put all current design, technology development and advanced test engineering under a single management structure. As a separate division, the technology services group will be better able to invest in, expand and provide cohesive global services, according to Jabil.

The Technology Services division includes a newly formed Optics Technology Development Lab, which will focus on continued development of process assembly and test technology for optical products. The lab will assist customers in bringing complex optical products to market, develop automation capabilities, design test processes and provide training for personnel from global sites.

Technology Services has locations in the US, Europe and Asia. The division has selected locations near or within high-volume plants.

Jeff Lumetta, who joined Jabil in 1986, will oversee the new division as VP of Jabil Technology Services.

Lumetta’s appointment is among other moves Jabil has recently made to strengthen its management team. Ron Rapp, a 17-year veteran of Jabil, was promoted to COO, a newly created position. He is now in charge of operations and business development at Jabil. Rapp had served as treasurer, CFO and executive VP of operations.

The company also promoted Scott Brown to senior VP of strategic planning, a new position, and Bill Peters to senior VP of operations. Brown had most recently served as VP of corporate development, while Peters had been VP of operations. Overseeing Jabil’s global operations, Peters succeeded Butch Edwards, who takes on a new role in operational development and training.

In addition, Jabil announced four promotions on the business development side. The provider named Brian Althaver as VP of Jabil Automotive Group, a new position charged with expanding and globalizing Jabil’s automotive business. Dave Emerson went from director of sales for the US to VP of US sales and marketing. Jabil promoted Joseph McGee to VP of global business units, while Roddy MacPhee moved up to VP of European business development.

More people on the move…Celestica (Toronto, Canada) has appointed CEO Eugene Polistuk to the position of chairman. In addition, the company has promoted Marvin MaGee from executive VP of worldwide operations to president and COO. With more than 20 years in manufacturing and development, Magee joined Celestica in 1997. Polistuk says MaGee’s new role “brings a strong focus to the company’s operational strategies, while allowing me more time to concentrate on Celestica’s long-term strategic positioning.”…Art O’Donnell has joined Solectron as COO of Global Services operations. A 25-year veteran of Digital Equipment Corp., O’Donnell was most recently VP of customer service for Gtech Corp. Denis Taylor, former VP and GM of Solectron Dunfermline (Scotland), was named VP and GM of Solectron Global Services Europe. The provider has also appointed Bart van Dijk as GM of Solectron Global Services Netherlands. He comes from IBM’s Amsterdam repair center, which was acquired by Solectron….Manufacturers’ Services Ltd. has hired Frank Coyle as VP of information technology. Coyle’s 20-plus years of IT experience includes senior-level positions at Stratus Computer and Honeywell. MSL has also appointed Steve Schultz as VP of marketing and communications. A 15-year veteran of high tech, Schultz most recently served as a principal with Computer Sciences Corp., where he focused on e-business marketing for the consulting division. Plus MSL has named Richard Gaynor, a financial executive, as VP and corporate controller. He comes to MSL after serving as VP and CFO for Evans & Sutherland Computer Corp. Finally, MSL has promoted Frank Binder to VP of pricing and M&A, a new position. One of MSL’s original hires, Binder had been VP of finance and corporate controller.

Correction: In last month’s outlook article on p. 4, we published the wrong reference to a previous optical article. The reference should have been Sept. ’00, p. 1-3.

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Copyright 2001 JBT Communications

MMI January 2001

MMI March 2001

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